Toll Group cuts ERP support costs by 50%

Toll Group has slashed ERP software maintenance costs by 50 per cent annually by engaging third-party support provider, Rimini Street.

The company will spend in excess of $1 million this year on maintenance of its Oracle database, Oracle E-Business Suite, Siebel, and Hyperion software with the provider. It was previously spending more than $2 million to Oracle for the same services before it engaged Rimini Street last April.

Interim CIO, Carl Duckinson, said the decision formed part of a wider transformation initiative and was driven by three factors: significant cost savings, improved service levels, and strategic benefits in terms of future application roadmap flexibility, and the ability to redirect funding for more pressing innovations.

Duckinson said the company now has access to skilled and responsive local engineers and the scope of inclusions is wider.

“Rimini Street’s model includes support for customisations as well as standard code and they can also provide advice on issues liked technology interoperability, system performance, and security,” he said in a prepared statement.

Andrew Powell, managing director, Asia-Pacific at Rimini Street, said transactions of this size with Australian customers are happening “once or twice” a month in Australia at the moment.

“They [Toll Group] have decided where they are going to spend their money and how they can spend it better,” said Powell.

Powell told CIO Australia that Toll Group will also be able to avoid upgrades because under the Rimini Street model, the organisation won’t need to update its versions to keep receiving support.

“They [Toll Group] have a massive range of Oracle products on [multiple] versions and if they were to continue down the vendor model to maintain a suitable level of support you actually need to have an upgrade every five years,” he said.

“So on top of that 50 per cent savings there’s a significant saving in the avoidance of upgrades.”

Costs relating to support for product customisations is also passed onto Rimini Street and not borne by Toll Group or any system integrators it uses, Powell said.

“So the savings are actually much higher than the engagement fee,” he said.

Powell told CIO Australia last month that it had seen a spike in job applications from Oracle engineers, following much speculation that software giant has offshore its Australian support operation.

A month later, Rimini Street was still seeing interest from Oracle specialists, said Powell.

Earlier this month, online publication, ITWire, said Oracle had closed its local support centre and shifted 170 jobs offshore. Oracle refused to deny the claim.